Seller Financing?

[GordMay]

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[Charlie]

When my Dad sold his Newport 30 on a contract he did something really wise. After checking the guys credit and so on (which all looked good) he cross colateralized it-- meaning my Dad had an attorney draw up a lien against the boat and his house. If something happened to the boat my dad could go after the guys house. If i were to sell with seller financing I would do somehting like that. Otherwise it would be too risky.

[GordMay]

Marine Liens Limited - Look up or Publish Boat Lien Information:
Welcome to MarineLiens.com - Reduding the Risk

[TaoJones]

. . . and, to my understanding, spot on.

IMHO, you are absolutely correct that, should it come to a legal proceeding to sort things out, the court is interested in one thing over all others; i.e. the "four corners" of the written contract. Only what is written there can form a solid foundation upon which to erect a sensible legal finding.

In one of your posts, though, I believe it didn't come out the way you intended.

Originally Posted by Pblais

If you still hold the title it's like you are loaning the boat to the seller and you still own it even if you have a sales contract. What you want to do is encumber the title so he can't sell the boat until you send in a written notarized official satisfaction of mortgage! At that point the seller can transfer the title to another party.

Am I correct that you meant to say that if you (meaning the seller, I believe) still hold the title, it's like you (again, the seller) are loaning the boat to the buyer, and you (the seller) still own it even if you (the seller) have a sales contract? What you want to do is encumber the title so he (the buyer) can't sell the boat until you (the seller) send in a written, notarized official satisfaction of mortgage! At that point the seller (you) can transfer the title to another party.

Otherwise, it just doesn't track for me. If I have misunderstood your intent, please straighten me out. Clearly, you are an authority in this area, and I value your insight.

TaoJones

[phairest]

I know this thread is super old, but I tripped over it looking for info so maybe others still are too...

Just wanted to chime in regarding the insurance (I'm a licensed P&C agent). Assuming one sells the boat in a similar fashion to a car/home, it is NOT recommended that the owner-turned-leinholder be an "additional insured" on the boat's policy; they should be an "additional interest." This seemingly small and often-confused distinction actually makes a HUGE diff concerning the policy parties duties/rights.

Here's a good writeup of the diff between terms: Named Insured vs. Additional Insured vs. Additional Interest vs. Loss Payee vs. Mortgagee | Insurance and Information For Real Estate Investors

Or, search for "additional insured vs additional interest" in your engine of choice and take your pick of the results, and/or have a conversation with your agent.

Another relevant topic is CPI: Collateral Protection Insurance. It's an optional safety net for leinholders, standard on commercially financed cars, and I imagine it would be available for boats as well. It provides coverage for the asset's protection in the event the buyer's policy lapses. More info here: Collateral protection insurance - Wikipedia, the free encyclopedia